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Weigh up currency options

DECIDING whether to buy, hold or sell a currency is a difficult business, even for full-time professionals. Yet many Irish companies willingly expose themselves to the risks inherent in volatile markets without a second thought, writes Olive Keogh.

When profits are boosted by foreign currency gains, managers seek kudos for their acumen. But when the pendulum swings the other way currency losses are brushed off as if they were merely an “act of God”.

“It doesn’t have to be that way,” says Aine Cornally, head of retail business at Bank of Ireland treasury and international banking.

Part of the problem, she suggests, is that the increased certainty accompanying the introduction of the euro has made many companies feel secure, including those doing business outside the eurozone.

Yet Irish small and medium-sized enterprises (SMEs) still do a lot of business in sterling and US dollars, whether buying raw materials and products